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Last Updated: Friday, 17 March 2006, 19:05 GMT
Have Your Say: Pension losses
PAG members protest at Labour's 2004 Brighton conference
PAG members protest at Labour's 2004 Brighton conference

A report calling for an estimated 85,000 people to be compensated after they lost all or part of their pensions has been rejected by the government.

Parliamentary Ombudsman Ann Abraham's investigation looked at whether the government failed to warn people of the risks of final salary schemes.

We asked for your comments and experiences. Below is a selection of your e-mails. This debate is now closed.

I paid into a pension scheme for 30 years until October 2000 when the company went into administration, I was made redundant and the pension scheme started to be closed down.

I had had worries after the Maxwell affair but was greatly reassured by the pension legislation which was passed, so was initially not too concerned.

I have lost faith in the financial industry and the government
Nigel Tout, Leicester
Five and a half years later it is still in the process of being closed down, so we are in the miserable position of having no definite idea where we stand, only being told that there is a large deficit.

I am assuming that I will get nothing. With this, the recent mis-selling scandals and the government's incompetence in general and tax credits in particular, I have lost faith in the financial industry and the government and will never again trust such an important financial matter to one organisation.
Nigel Tout, Leicester

I am affected by the pensions scandal, but am not covered by the Parliamentary Ombudsman's report, as my scheme is not yet in wind-up.

However the treatment of the report and the 85,000 people who have lost their pensions is a disgrace.

Of course the government is at fault. Of course full compensation should be paid. I doubt that is anything near 15 billion advised, but to describe even that as "unaffordable" is completely unfair.

Why is this government ruining the defined benefit pensions of this country?
Kevin Mark Robinson

The way the government has dismissed the ombudsman's report is disgusting and immoral. It shows a complete disregard for the issues and problems that ordinary people face. And, as a lifelong Labour supporter, I am shocked that I can write such a thing.

The fact is Labour has been in government too long and needs to think again about what is the reason they seek power. It is clearly not to protect the weak and disadvantaged. A plague on them all!
Ken Woodcock, Penryn

I am a pensioner, personally unaffected by this private pensions debacle, yet I feel outrage at the plight of those who invested their money in good faith only to lose it because a company fails or abuses the sanctity of their pension investments.

This issue must not be allowed to fade away
James Howard, Motherwell
No company should be allowed to walk away from their responsibilities in such a life-destroying way. In those very rare circumstances where failed companies genuinely cannot meet their pension obligations, the government, and us taxpayers, are morally obliged to pick up the tab.

This issue must not be allowed to fade away, lost to public awareness, because the media comes to see it as yesterday's story.
James Howard, Motherwell

The whole problem with this pension problem is that the government makes the rules, the FSA has to regulate those rules, and neither have taken responsibility for their actions.

I believe the government wants us to take out pensions which will lock us into an annuity income which will then be just too much for us to be eligible for state benefits.

This government doesn't like being told its wrong and doesn't know what it is doing.

Not only will it ignore the Turner report, it has ignored the judgement of the ombudsman decision as well.

Who in their right mind will ever put a single penny into a pension now? I know I won't.
Graham, Kent

The problems are not limited to those companies which went bust.

My former employer went into voluntary liquidation in 2004. Since the business was solvent and cash rich, the liquidators were able to satisfy all creditors and return millions to the shareholders.

The "hole" in the pension fund has meant that pensions have been reduced by some 50%. The nature and location of the business meant that many employees and former employees spent their working lives there. The FAS does not apply in this case. All this apparently, is legal.

Of course the government needs to help these people who have done nothing wrong, not because it is to blame, though it was dreadfully slow in introducing legislation, but because it is the decent thing to do.
David Heyes

I will be 60 in May and I'm looking forward to retiring on my OAP and an NHS pension.

I feel such anger at the government that it can treat people like this
Ann Best, East Sussex
I just can't imagine how these pensioners must be feeling. I feel such anger at the government that it can treat people like this, with what I think is contempt. It is ruining people's lives.

I was so upset by the report that I thought the only positive thing I could do is to write to you to give these pensioners my support and if they need a name or signature to support their cause for compensation may I please be counted amongst their supporters. I feel such sympathy for them all.
Ann Best, East Sussex

Everyone should move to money purchase schemes for their occupational pension which they take with them when they move jobs - not final salary schemes which so favour those who stay in one job, especially a civil service one, for all their career. Fairness is essential in such important issues which affect all of society.
Martin Roach, Cambridge

The first function of government is to look after the welfare of its citizens. People who have contributed to a pension scheme deserve to reap the benefits at the ends of their working lives. It seems to me that the government (out of public funds) should compensate those whose pension schemes fail when it is no fault of their own. I cannot see how in the name of justice, morality or just good government those in power can in good conscience do anything else.
Graham I Lock, Chatham

The government has a moral duty to help these pensioners. We were all duped into believing that, after the Maxwell scandal, the laws had been changed to ensure that pension funds would be protected from plunder by employers. This should have been done and if it was not, the government is responsible for the consequences.

Future governments will pay the real cost of not helping a few thousand pensioners today
J Harland, Glasgow
If nobody can have confidence in occupational pension schemes, nobody will bother to contribute to them and future governments will pay the real cost of not helping a few thousand pensioners today.
J Harland, Glasgow

Isn't it interesting how the government can treat the ombudsman's judgement with such contempt and say it does not agree with it?

Does this mean that if a court ever makes a judgement against me I can simply turn around and say: I don't agree with it? What an example of responsibility, leadership and moral fibre.

I think the only way we could ever get a sensible decision on these matters would be by having a referendum.
Peter Dwyer, Rochdale

I think this government needs a good kicking in the ballot box, where it hurts, at the next election. It has consistently treated OAPs as inferior citizens and trivialised pension issues since it got into power nearly 10 years ago.
John Hudson, Stansted

The government is right to walk away from the pension promises. The promises provided to members were such that the employer would provide the benefits (or deferred pay) if he could. These were best endeavour promises not guarantees.

If people are looking to place the blame on someone then they should look to the trustees of the collapsed schemes who should have been asking for more from the employer during the years the schemes were running. Then this problem would not have existed.
Victor Vassou, Brighton

Has there not been a suggestion that money in dormant accounts be used for those pensioners who have been so unjustly treated? This seems an eminently sensible idea and should receive much more publicity in the hope of shaming the government into using it for this purpose.

It is tragic that people at the end of their working lives should be in such a situation
Rowena Rudkin, London
The young, for whom I understand this money is intended, have benefited immensely from successive governments since 1997. It is tragic that people at the end of their working lives should be in such a situation after many years of making provision for their retirement.

I am not one of those directly affected. I hate injustice.
Rowena Rudkin, London

The present pension crisis demonstrates the real lack of care, incompetence and mis-management by successive governments and also the insurance industry. The only winners are the industry who take money from the vulnerable and of course, those who have plenty of money and don't really need a pension.

Whilst successive governments do nothing in way of regulation, let the rich get away with tax avoidance, allow fat cats access to extortionate pensions for themselves fleecing the pension from company schemes from those who really need it, there will be no sensible answer to the crisis.

When are people going to wake up and realise the problems stem from free-market practices, which in reality only reward the rich and powerful.
John Wagstaffe,

The DWP's response can be paraphrased:

  • no one reads official leaflets anyway
  • but if they did, they should know they are meaningless
  • it's trustees fault if people believe official leaflets, as the trustees should have told members to ignore government leaflets
  • or maybe it's the actuaries fault, as they advise the trustees
  • but it's not our fault! We act on advice, but not when we disagree with it
    Andrew Parr, Pensions Action Group

    As a taxpayer, and a company pension contributor for over 25 years, I am appalled at the government apparently washing its hands over this scandal. Governments have told us for many years to pay into company pensions, with no mention of the risks.

    Were this to happen in the financial services industry, compensation would have to have been paid (and has been in the past).

    I personally don't care where the money comes from as long as they get what they were promised.

    Also the government made no efforts to put into legislation a method of protecting their pensions as required by European law. Only now after this has happened have they done this.
    Ian Jones, Rugby

    I feel for the people who have lost out, and clearly, the government leaflets did not properly make the risks clear. But it wasn't the government that lost all the money in these funds.

    Why should the taxpayer have to foot the bill for private sector mismanagement?
    Nilavra, London
    Yes, the government should take some responsibility for its mistake but can we not let these private companies off the hook please? If they're bankrupt then let's go after the directors.

    Why should the taxpayer have to foot the bill for private sector mismanagement?
    Nilavra, London

    As one of the unfortunate pensioners who lost his retirement income, I have to question where in the government papers it states that the information is inaccurate and like all government leaflets should be disregarded?

    The labour leaders have used the 15 billion figure, presumably to scare the public. Where did this figure come from? No-one else including Labour back benchers seem to believe this number, and even if the cost is extrapolated forward 60 years cannot reach anywhere near that figure. This is 176,470 per pensioner!

    Just for the record, Gordon Brown's tax raid on pensions has netted the Treasury at least 45 billion since Labour came to power so perhaps even the 15 billion is affordable!

    Just for the record I was a company director and my pension went up in smoke along with everyone elses.
    Peter Odell, High Wycombe

    As a 52 year old who is a member of a money purchase pension scheme, I have little sympathy with the compensation case. I too face relative poverty in retirement compared to those in well-funded, viable final salary schemes.

    What I want the government to do is to end the pension lottery
    George Hazell, Leicester
    Should the government compensate those who "didn't know" their pension investment was not safe? Should the government compensate me too because the value of my fund collapsed in 2000 and 2001? No to both.

    What I want the government to do is to end the pension lottery by giving tax incentives/credits to those of us in work who face relative poverty in retirement for whatever reason so we can offset our pension deficit with additional savings.
    George Hazell, Leicester

    I worked for 39 years for a company paying into a pension scheme and lost it. I took my case to the Parliamentary Ombudsman to find that she found the government guilty on all counts and the government rejects her decision!

    Why have an ombudsman? I am appalled at the government's response.
    Barry Tillson, Southend on Sea

    How dare the government dismiss the ombudsman's findings in such a cavalier and arrogant manner?

    Please don't forget Gordon Brown's first act as chancellor was to take 5bn a year from pension funds which, with the downturn in the stock market five to six years ago, did a lot to destabilise the pensions market.

    Brown has had upwards of 45bn from pension funds. It's time he gave a mere 15bn of it back!
    Hopping mad, Somerset

    I suspect that existing pensioners have a higher priority claim on the remaining scheme assets than future pensioners.

    We should persuade the law-makers to devise a more equitable way of sharing the assets
    John Smith, Blackburn
    This leaves those about to retire with next to nothing. But someone about to retire has the same need of a pension as someone just retired.

    So we should persuade the law-makers to devise a more equitable way of sharing the assets.

    Then everyone would get a large part of their originally promised pension, and total misery will be averted.
    John Smith, Blackburn

    The government is protecting the taxpayer from paying for something? Get real!

    The taxpayers' money has already been taken. It just needs channelling in a direction which will help a few British people who have been conned!
    Neil Dougal, Bordeaux

    I am secure in my pension. The attitude of the government to those who (relying on official guidance) have lost their pension entitlement is scandalous and totally without merit.
    Professor Christopher Baker, Wilmslow

    The government cannot walk away from these collapsed pension schemes. They are responsible for the inadequate legislation that resulted in the pension funds being inadequately protected.
    Martin Redfern, Maidstone

    The generation which has lost its pensions voted in 1979 for low taxes and the free market. They got it. Now they are asking for me to bail them out.

    People must have been really stupid if they genuinely thought their pensions were safe no matter what happened to their company
    John, Bristol
    Once I did not join a company pension because the scheme was obviously very badly run and the trading position of the company was bad. When it had been good, the company took maximum pensions holidays.

    Can I have compensation from the government for my loss of opportunity? Of course not.

    People must have been really stupid if they genuinely thought their pensions were safe no matter what happened to their company.

    I can understand the BBC being tough on ministers on this issue, but possibly out of sympathy with the people who lost out, the BBC is not challenging people who argue the other way.
    John, Bristol

    Not mentioning the risk is precisely why the life insurers were in trouble over the pensions mis-selling and endowment mortgage scandals.

    Governments think they can get away with behaviour which would be called fraud or mis-selling if it was carried out by the private sector
    Patrick Lee, Bournemouth
    As ever, governments think they can get away with behaviour which would be called "fraud" or "mis-selling" if it was carried out by the private sector. The government simply cannot be trusted on anything.
    Patrick Lee, Bournemouth

    I am absolutely appalled at the government's response to pension losses.

    It seems beyond belief that they can abrogate their responsibilities having clearly misled people into believing their pensions were protected.

    This looks bizarre set against the previous pension mis-selling scandals where the industry was forced to compensate those it misled.

    The pensioners should be compensated by the government.
    Mr Greg Duddy, Redditch

    Let there be no misunderstanding, this is a problem that is almost entirely of Gordon Brown's making.

    Most of the pension funds that are now unable to pay all their pensioners have abided by government rules but have suffered from:

    If the government had not caved in to public sector workers then it would be able to compensate these people
    Simon, London
    a) Gordon Brown's tax on pension funds introduced in 1997

    b) being forced by the government's reductions in funding requirements (and consequent tax effects) to reduce their contributions at the top of the share price bubble, just when they should have been putting extra aside for a rainy day

    c) the campaign that so obviously misled people to have blind faith in "guaranteed" work place pension schemes

    If the government had not caved in to public sector workers then it would be able to compensate these people who have lost out.
    Simon, London

    The government should compensate the workers affected by pension losses.

    The government eroded their own minimum requirements for company pensions in 1999 and 2002 and failed to draw attention to potential risks in their public leaflets.

    The government's future credibility is very much at stake as is the credibility of their literature.

    I'm just an ordinary member of the public and a tax payer.
    Susan Haynes, Guildford

    I listened with considerable disgust to what was clearly a miserable bobbing, ducking and weaving effort by the minister in his explanation concerning the government's decision not to assist those unfortunate pensioners.

    It was the sort of interview that reveals the mean-spiritedness of government as well as its willingness to stoop to disingenuous tactics.

    Congratulations on an excellent interview and article: I have no pensioner's axe to grind on this issue, fortunately, but as a taxpayer and citizen I am ashamed to see the way the government is dealing with this. I shall be writing to my MP.
    Ray Allen, Stockport

    The government is in essence correct. Taxpayers who have not got pension schemes or who are salary-sacrificing via money purchase schemes (bearing investment risk without guarantee) should not have to bail out those who were unlucky enough to be in company pension schemes that failed.

    The taxpayer should not act as an underwriter for failed company pension schemes
    Peter, Milton Keynes
    There is a state pension and a pension credit system funded by the taxpayer that is designed to ensure that pensioners are provided with a basic income.

    Most employees on final salary schemes are required to make minimal contributions in comparison to the benefits received.

    Life is a risky business and that is why we have a benefit system. The taxpayer should not additionally act as an underwriter for failed company pension schemes.
    Peter, Milton Keynes

    The government and general tax payer should not bail out these people who entered into private company pension schemes.

    These people must realise that they got the benefits of working for private companies and must also take the risks that go with it! I am an ordinary tax payer.
    Donaldson, Southampton

    The government is conveniently trying to forget that individuals with company pensions had and have very little opportunity to spread risk as they could for other investments.

    Therefore company pensions are a special case, are under regulation, and the 85,000 people deserve better treatment.
    Andrew Cameron, Hampshire

    Surely after Maxwell any company pension should be protected. At least then the fund would be frozen and accrue with prudent investment, run by the original trustees.

    I knew many who lost their pension via Maxwell and the Daily Record in Scotland. It was a mess, and to think of that potentially happening to others now is appalling.
    John Tindall, Redhill

    I have a military pension, so I'm all right Jack. But I can imagine how it must feel to have a limited or no pension, despite having saved for one.

    I am now absolutely certain that the government was largely to blame
    Chris Barker, Cambridge
    I am appalled that this government has been so devious about company pensions. I am particularly disappointed that Tony Blair has dismissed the report by the ombudsman.

    I am now absolutely certain that the government was largely to blame for the problem and that we, the taxpayers, should be making the problem go away... as well as making the system of company pensions better. Keep up the good work.
    Chris Barker, Cambridge

    They have not insured the safety of their money, so why should I bail them out?

    Putting my blue conservative wig on, if they had worked harder then their firms would have not gone bust!

    Putting on my red socialist wig on, will I be compensated if my private savings for retirement fail to perform?
    R Jackson, Harrogate

    The idea with the leaflets was to encourage us all to go for company schemes to reduce the burden on the state. Nothing wrong in that perhaps.

    People still believe the official line given in general advice documents, advice given by people who have of course really secure inflation-proofed pensions.

    The money should be found for these 85,000 people.
    David King, Cambridge

    I have a private pension that I had to take a couple of years ago. I got half what had been predicted as did thousands of others in the same position as myself.

    We could argue that we were also told by the government that this was the safest way to save for our old age.

    It would open the flood gates and the tax payer would never be able to afford it
    Anthony Eden, Nottingham
    This is why it is impossible to give in to the present claims, as it would open the flood gates and the tax payer would never be able to afford it.

    The companies concerned were the ones at fault, and in most cases the directors got away with fat pensions and could not care less about their former employees.

    The government should pass a retrospective law that no director be allowed to have a pension pot separate from their workers.

    I bet there would not be any failures then
    Anthony Eden

    I am an ordinary taxpayer with total sympathy for all those who have been gravely misled by worthless reassurances contained in the government's so-called "Guidance" leaflets.

    They should not waste their time appealing via Tony Blair's deaf ears! I strongly urge every one of them to pool their grievances (already strongly backed by the Ombudsman), and take the case to Europe.
    John Jay, Walton on Thames

    This programme should be accompanied by a warning that this government can damage your future.
    Dave McAuslan, Bristol

    Of course the government can afford to pay, even in the unlikely event that the 15 billion figure is true.

    Brown has taken 5 billion plus from pension schemes each year for some time now: he simply has to give it back.
    Les Pitts, Ivybridge

    Why is it that the government cannot legislate so that all pension providers must place their contributions with say an insurance company and hence outside the industry, so that no loss can occur from bankruptcy or misuse.
    Henri S Coronel, Claygate

    Why is there no mention of the fact that younger people paying their National Insurance contributions will probably have a miniscule pension if anything at all when we retire, if retirement is even actually allowed in the future.

    Leave something for future generations you selfish lot!
    Mat, Hampshire
    Most of the current and new pensioners are from the post war era, didn't fight for the country and gave unions a stranglehold on the country throughout the 70s. Most have massively benefited from the housing boom. Let that be their compensation.

    Pensioners that did something to help the country during the war however should be given every assistance. Leave something for future generations you selfish lot!
    Mat, Hampshire

    The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

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